The Great Depression

Question 1

weaknesses of the boom

Answer 1

modern technology only helps big businesses, inequalities in pay, end of war time boom, competition for jobs, lack of government regulation eg poor working conditions and lack of trade unions, strikes, violence, riots, demand for older industries in decline, machines replace workers = lower wages and overproduction

Question 2

President 1928

Answer 2

Herbert Hoover republican

Question 3

Bull market
Bear market

Answer 3

more buyers than sellers of shares
opposite

Question 4

share holders 1920 vs 1929

Answer 4

4 million to 20 million (US population 120 mil 1929)

Question 5

speculators

Answer 5

a form of gambling. borrowing money to buy shares and sell them as soon as price rises. Many speculators were women. banks did speculation as well. by 1928 speculation took hold and demand for shares was the highest ever

Question 6

‘on margin’

Answer 6

put down 10% needed to buy the share and borrow the rest

Question 7

Signs of weakness of the American economy 1929 (6)

Answer 7

downturn in a reliable construction industry since 1926
500 banks failing per year 1920s
surplus of goods
only the rich get richer
an increase in marketing but no increase in demand
American goods expensive in Europe because Europe also tariffs American goods

Question 8

Black Tuesday

Answer 8

Oct 29 1929 worst day in stock market history. $15 billion lost on that day. $50 billion lost by the end of the month

Question 9

bank run

Answer 9

rushing to withdraw deposits at the bank. leads to 9000 banks closing by 1932

Question 10

summary of great depression

Answer 10

overproduction and underconsumption killed the economy. too much produced that consumers could not buy and too much money spent on unproductive purposes like speculating.

Question 11

percentage families earning less than $2000 annually and why

Answer 11

2/3. business owners enjoyed profits without raising wages of workers.

Question 12

USA 1929-32

Answer 12

dropped almost 27%
25% unemployed

Question 13

Federal Reserve during great depression

Answer 13

manages money supply and interest rates. reduces money supply by 1/3 between 1929-32 to curb inflation

Question 14

Impact of European economy on American goods

Answer 14

not fully recovered from WW1
buying less from US as economies are improving
UK, France, and Germany still heavily indebted after war

Question 15

Causes of the Wall Street Crash

Answer 15

tariffs on European goods
overproduction and wealth gap
speculators
small investors cannot pay back loans if share prices fall

Question 16

Spark of the Wall Street Crash

Answer 16

experts lost confidence in the economy and sold shares making share prices fall. everyone panicked to sell shares as the share prices fell

Question 17

Consequences of the Wall Street Crash

Answer 17

downturn in spending
many bankrupted
banks failed because people withdrew all their money
by 1932
14 million unemployed
5000 bankrupt banks
agriculture prices low and income drops
USA international trade decreases by $7 billion
almost 25% unemployed

Question 18

struggling farmers

Answer 18

farming fell from $6 billion to $2 billion
farmers that had mortgages were unable to pay making 1/3 lose their land
farmers move to the city instead
drought affecting in the east
dust storms and black blizzards
struggling from competition outside USA
Farm labourers competing against machines
Small Farmers lost the most

Question 19

effect on cities

Answer 19

many farmers migrate to cities
not enough food - soup kitchens set up

Question 20

Bonus Marches

Answer 20

20,000 WW1 veterans marched on Washington to get the bonus money they were supposed to receive in 1945 for serving in the war sooner. This ended in 100,000 given to marchers to go back but some stayed and protested. Hoover ordered in the army and tanks. 100 injured a child killed. Hoover’s reputation was down in the dumps. veterans seen as communists and criminals

Question 21

Hoover’s response

Answer 21

Reconstruction Finance Corporation $500 million loans for banks. 1.2 billion authorised for first 6 months
Emergency relief act July 1932. $300 million to RFC and $1.5 billion to construction projects.
no direct relief for struggling citizens
tried to convince people that there would be an economic rebound to get more spending going
too little too late

Question 22

1932 election

Answer 22

46/48 states won by fdr 472 v. 59 electoral votes
25% unemployed 1932
people lost all faith in Hoover and shanty towns were called Hoovervilles
violence to bonus marchers
FDR promises change and “A New Deal” for the American people and uses government money as opposed to Hoover